Our Perfect Home Loan Match: How to Find a Loan That Keeps You Warm at Night

Do you find that you’re usually attracted to the same type of person? We all have a mental image of our perfect mate – some people are even lucky enough to wake up next to that person each day.

Finding your perfect loan match is like finding your soulmate – warm, secure, and perfectly suited to your needs.

Just as the dating market can be tricky to navigate, it’s easy to miss the signs and find yourself attracted to the wrong home loan. To help you find your perfect home loan match, here is a quick rundown of the different types of home loans available.

Basic Loan

Basic home loans usually don’t have a lot of fees. What you see is what you get. Typically, you get a low interest rate, but not much else. If you want some features and flexibility, this might not be your perfect home loan match.

Introductory Rate Loan

Also known as a “Honeymoon loan,” this type is like some new relationships. You get a great deal at the beginning, and everyone is happy. After a year or two, the honeymoon is over, and you find out what the loan will cost you.

This is a good option if you want to keep your repayments low initially, but investigate the interest rate you’ll be charged after the introductory period.

Standard Variable Rate Loan

For those who want to pick and choose their features, the standard variable rate loan could be your perfect home loan match. You generally get a competitive interest rate with the flexibility to select some options that suit your needs.

Low-Doc Loan

A low-doc loan is a great alternative for self-employed borrowers who often struggle to find their ideal mortgage. Low-doc loans allow you to use different methods of proving your income. While the rules are less restrictive, you’ll usually pay a higher interest rate.

On top of that, most lenders require self-employed borrowers to contribute a 20% deposit and cover all upfront costs, such as Stamp Duty and Lenders Mortgage Insurance (LMI). This is a suitable option for those who have no other alternatives.

100% Home Loan

Also known as a “No-deposit loan,” this allows you to borrow 100% of the purchase price. Don’t be fooled though – this is not a free ride.

Most lenders still require you to save a 3% deposit to cover LMI, and you’ll also need enough funds to cover stamp duty, moving costs, conveyancing, and other associated expenses. The availability of these loans depends on the lending environment, but it never hurts to ask.

Finding the perfect home loan match might take some time, but with a little research and guidance, you can find a loan that keeps you warm at night and meets your financial needs.